Regarding this specific question - we try not to lie and are Christian. our children DO know that Christ wasn't really born on that day, the wise men came years later, and we don't know how many there were. They know it's just how we celebrate it. They know Santa isn't real but they still enjoy the idea of him and like to have Santa decorations, etc.

That's what we do as well. Thank you for answering I'm such a huge theology/history tied-in buff that it actually fascinates me.